Shah01ankita
Talent Acquisition / Consultant - Catalis
Malikjs
Gm (hr)
Rajusharadha@yahoo.com
Managing Director
+2 Others

Hi,
I have been working in an organization from past 10-years and now resigned and at the time of resignation I was asked to sign a declaration on a stamp paper wihtout which I can't handover my charges. I did the same without guessing any of it's consequences. The declaration says I should not join any similar services for few years and should not start any similar activity.
After working for past many years in a similar area, it has become difficult to find a work different from the past. I am in dilemma and unable to work as I got some offers similar in nature and some have approached me to support as consultant and I am in fix not to take up anything. This is affecting me a lot.
Can someone help me throw some light on this, I would be much obliged.
Best regards
A.Sagar
think twice before you do anything which may harm your future. this would a lesson for you and in future you need to think of consequences of any declaration.
Dear Sagar
Donot worry and chill out. .take job wherever you want but do it after getting relieving letter.
please refer section 27 of contract act where it is written 'Every agreement by which anyone is restrained from exercising a lawful profession,trade or business of any kind is to that extent void.'
now the the said declaration becomes void and no one can you restraint to join the competetior.if you have time you can read the attachment.

Attached Files
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File Type: pdf Negative Covenant in Contract of Employment-1 (3).pdf (108.5 KB, 129 views)

No need to worry. You can just like that ignore the agreement. No one can stop the growth of an individual by using such agreement. One thing you can do, you can work in the same kind of industry in which you worked before but you should not disclose the trade secret of your previous company to the present employer.
Hi Sagar,
Many companies put this clauses in their service agreement / offer letter / relieving letter etc.
Ideally that clause is hampering the individual's right to work at a place of his will so that can't be fully questioned.
The main reason they put such clause is because when the company trains you on certain skill set, they would not like you utilising their efforts at their competitor's place.
Seldom have we seen cases like this unless the two companies (ur former and current employers) have signed a no-poach agreement. But even in that case, it will the two employers headache.
Usually the companies do educate employees who all their clients are and usually this is also the list of the employers you can't work with thereafter...
I am unsure of on the impacts that occur but ideally it shudn't be very serious.
Dear All,
Thanks for your valuable inputs - it helps me a lot.
In fact my earlier employer is still holding my settlements and relieving letter. They don't reply my emails and do not respond on phone. After having worked for many years they need to pay me few lakh rupees as part of gratuity, PF and other dues. some of my well wishers suggest me to take up this matter in legal way. I am still unsettled and it is affecting me a lot.
I am in kind of unstable position so far. Not sure why employers trouble the individuals so much??
Regards
Sagar..
" I was asked to sign a declaration on a stamp paper wihtout which I can't handover my charges. I did the same without guessing any of it's consequences""

First thing is never sign without understanding full meaning of what is being put in front of you for signature.

Now having signed-please tell how many years do they want you out of the particular field of your expertise?

What is the exact wording of your"declaration"

As far as I am aware such agreements have no real value as no one can restrain you from practising yur trade or vocation.

You off course have to respect the trade and professional secrets of your former company.

That is all about it.

What position were you holding that they do not want you to work/join other company in same field.

Article 19 I G of our honoured and respected Constitution reads as follows:

All the citizens shall have the right:

“to practice any profession, or to carry on any occupation, trade or business.”

However, the right to carry on a profession, trade or business is not unqualified. It

can be restricted and regulated by the authority of law. The restrictions have to be

reasonable and in public interest.

Moreover, it is important to understand that fundamental rights are available only

against the state or in other words government or government undertakings.

Section 27 Contract Act also is helpful to you.

It reads as follows:

Section 27 of the Indian Contract Act makes void all contracts that impose ‘restraint

of trade’. The provision is as follows: ‘

“Every agreement by which anyone is restrained from exercising a lawful profession,

trade or business of any kind, is to that extent void.

Reading of Competition Act 2002 may be helpful.

Some case laws;

Superintendence Company of India Pvt Limited Vs. Krishnan

Murgai

Desiccant Rotors International Pvt. Ltd. Vs. Respondent:

Bappaditya Sarkar and Anr.3

Obtain your F and F,and other documents by personally visiting,putting your demands in writing.Last resort think of going to statutory authorities for gratuity and legal notice for other documents and payments due.

After that go ahead and work where you wish but confidentiality of your knowledge about previous employer,processes,products need to be strictly honoured.

Finally consult your legal advisor who will tell you what is to be done after disucssing with you and seeing papers.

Our discussion is only general in nature and kind of guidelines/outline of possible actions.
Hi NATHRAO,

Thank you so much for your suggestions. I did understand now that I shouldn't have signed this kind of a document, but I was under pressure to close my accounts with that oragnization so took decision in haste and also the HR person was able to convince me softly to sign..

They have mentioned in that document that I should not join or carry out any similar business for 3-years from the date of relieving. I haven't disclosed any trade details/secrets of this company with anyone so far. I too have respect with that organization which I have worked for so long. At the same time they are holding my relieving letter and settlements - this is putting me in a fix not to fully take up anything.

I am also thinking of taking up some consultancy with similar business units and start up something related to my field.

I consulted for some legal opinion on this, they gave similar feedback and told me that I can send a notice and take it up further. I am bit afraid that the people who are rich and in power can trouble me further if I get into this way, this is my concern....please suggest...

Regards
Sagar
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